Intermediaries in tax-free exchanges: Unlawful acts; criminal penalty; civil penalty.
1. It is unlawful for a person to enter into an agreement to act as an intermediary to hold the money of another person pursuant to an exchange of property which is or is purported to be tax free pursuant to 26 U.S.C. § 1031 unless:
(a) The intermediary is a qualified intermediary as defined in 26 C.F.R. § 1.1031(k)-1(g);
(b) The money is deposited in a qualified escrow account as defined in 26 C.F.R. § 1.1031(k)-1(g); and
(c) The money is held in such a manner that it may not be withdrawn from the escrow account without the written approval of the intermediary and the person for whom he is holding the money.
2. A person who violates the provisions of this section is guilty of a category D felony and shall be punished as provided in NRS 193.130.
3. In addition to any other penalty imposed, the court shall order a person who violates subsection 1 to pay a civil penalty of not less than $10,000. The money so collected:
(a) Must not be deducted from any penal fine imposed by the court;
(b) Must be stated separately on the court’s docket; and
(c) Must be remitted forthwith to the Administrator of the Real Estate Division of the Department of Business and Industry.
Last modified: February 25, 2006